Optimization Consulting, Inc. v. United States

In the United States Court of Federal Claims

No. 13-103 C

(Filed: November 22, 2013)

Released for publication: February 28, 20141

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OPTIMIZATION CONSULTING, INC., *

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Plaintiff, *

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v. *

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THE UNITED STATES, *

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Defendant, *

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and *

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GOLDBELT GLACIER HEALTH *

SERVICES, LLC, *

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Intervenor-Defendant. *

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Sharon O. Steele, Watson & Associates, LLC, Washington, D.C., for Plaintiff.

John S. Groat, Commercial Litigation Branch, Civil Division, United States Department

of Justice, Washington, D.C., for Defendant.

Elizabeth M. Gill, Patton Boggs, LLP, Washington, D.C., for Intervenor-Defendant.

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OPINION AND ORDER

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DAMICH, Judge:

1

The court issued this opinion under seal on November 22, 2013, and gave the parties to December 9,

2013, to propose the redaction of competition-sensitive, proprietary, confidential, or otherwise protected

information. The court has accepted the parties’ proposed redactions, which are indicated herein in the

format of three consecutive asterisks within brackets (“[***]”).

In this post-award bid protest, Plaintiff and Defendant have filed cross-motions

for judgment on the administrative record (AR) with respect to a request for proposals

(RFP), No. W9133L-12-R-0024 (the Solicitation) issued by the National Guard Bureau

(NGB) on July 6, 2012, for proposals to provide psychological health support services to

the Army and Air National Guards (ARNG and ANG, respectively). The RFP was issued

as a small business set-aside and provided for the award of multiple, indefinite-

delivery/indefinite quantity contracts with a 3-year base period and a 2-year option

period. AR 854.

There were 10 proposals submitted in response to the Solicitation. See Def.’s

Mot. for J. upon the AR and Resp. to Pl.’s Mot. for J. on the AR with App. (Def.’s Mot.)

at 4. The NGB selected four offerors, not including OCI, for inclusion into a competitive

range for the purposes of further communications or clarifications. AR 5935. Per Section

L.1.2 of the Solicitation, “In evaluating the proposals, the Government may establish a

Competitive Range to reduce the Offerors participating in the competition to only those

Offerors most likely to receive the award.” AR 968-969.

OCI protests its exclusion from the competitive range, arguing that the NGB: 1)

erred in its evaluation of the price and past performance elements of OCI’s proposal; 2)

failed to exhibit good faith and fair dealing; 3) improperly evaluated the past performance

of a competing offeror Goldbelt Glacier Health Services (Goldbelt Glacier);2 and 4)

should have referred OCI to the Small Business Administration (SBA) for a

responsibility determination before excluding it from the competitive range.

Defendant asserts, however, that the court lacks jurisdiction to hear OCI’s

complaint because OCI has failed to meet its burden to establish standing to bring its

action. OCI, the government avers, has the burden to prove that it is an “interested

party,” by showing a direct economic interest that would be affected by the award. Rex

Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). The thrust of the

Government’s argument is that OCI “would still have been excluded from the

competitive range even if the NGB had calculated OCI’s price in the manner that OCI

now contends the solicitation required,” and thus “suffered no possible competitive harm

and no prejudice.” Def.’s Mot. at 13.

Defendant further argues, inter alia, that the record reflects substantial evidence in

support of the NGB’s rating of OCI based on past performance and its exclusion of OCI

from the competitive range on that basis.

For the reasons stated below, the court denies OCI’s motion for judgment on the

AR and grants Defendant’s cross-motion.

2

Goldbelt Glacier, Intervenor- Defendant here, was one of two bidders who were subsequently awarded

contracts under the Solicitation. See Office of the Assistant Secretary of Defense (Public Affairs), U.S.

Department of Defense (March 21, 2013), available at

http://www.defense.gov/Contracts/Contract.aspx?ContractID=5002 (last visited November 21, 2013).

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I. Background

OCI is a minority-owned, service-disabled veteran-owned, small disadvantaged

business, Compl. at 6. Prior to the procurement at issue here, it served as a contractor for

the NGB providing mental health support services to the ANG on a pilot project. Pl.’s

Mem. in Support of J. on AR (Pl.’s Mot.) at 34-35. The pilot project was less

comprehensive geographically and substantively than that proposed in the instant

Solicitation. Transcript of Hearing, Feb. 12, 2013 at 18:16-25. According to OCI, over

80% of its employees and revenues derive from the support services provided via the

pilot project. Pl.’s Mot. at 35.

In the course of its work on that contract, OCI developed dissatisfaction with the

performance on the project of its National Director of Psychological Health, Dr. Beth

Zeiger. Pl.’s Mot. at 10; see also Decl. of Richard Holmes, OCI Chief Operations

Officer, Apr. 22, 2013, Docket # 29. Dr. Zeiger was subsequently placed on a

performance improvement plan and ultimately terminated her employment. OCI relates

that key agency personnel were discomforted that they were not informed in advance of

OCI’s actions with respect to Dr. Zeiger. See “Post Meeting Report,” Docket # 30,

Attachment 1 (“Post Meeting Report”).3 The Dr. Zeiger matter features notably in OCI’s

objections to NGB’s rating of OCI’s past performance.

The RFP was issued on July 6, 2012. In its terms, it provided that proposals

would be evaluated on a best-value basis, encompassing three non-price factors and one

price factor. AR 984-85. In order of priority, the factors were: Mission Capability, Past

Performance, Small Business Participation, and Price. Id.4 The non-price factors, when

combined, were more important than the price factor. Id. The mission capability factor

included two subfactors of equal weight: 1) overall capability and 2) representative tasks

for ANG and ARNG Director of Psychological Health (DPH) support. Id. The overall

capability subfactor included four elements: “Corporate Experience,” “Corporate

Resources,” “Continuous Quality Improvement Plan,” and “Quality Control Plan.” AR

595-96.

With respect to past performance, the RFP provided:

The Government will evaluate past performance of three

(3) current or previous contracts for relevancy based on

how well the contractor performed on projects of similar

dollar value, scope, and complexity. Offerors are advised

that the Government may use past performance information

3

Defendant objects to any consideration of the Holmes Declaration and the “Post Meeting Report” as

impermissible “extra record evidence.” Def.’s Mot. at 25. The Court addresses the Government’s

objections in due course.

4

Thus, an offeror’s proposal was to consist of five volumes: Volume I – Mission Capability; Volume II –

Past Performance; Volume III – Small Business Participation; Volume IV – Cost/Price; and Volume V –

Solicitation, Offer and Award Documents and Certifications/Representations. AR 591.

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obtained from centralized past performance databases and

sources other than those identified by the offeror . . .

AR 598.

Each offeror was provided an alphanumeric code to use in its proposal in order to

preserve anonymity. AR 968. OCI’s code was 09C4. AR 2854. The original deadline

for submission of proposals was August 6, 2012. AR 197. Amendment 3 to the

Solicitation, posted on July 30, 2012, changed the response date to August 8, 2012. AR

713. Amendment 4, posted on August 3, 2012, changed the due date to August 9, 2012.

AR 789. OCI submitted its proposal, under its code “O9C4,” by the August 9 deadline.

On August 30, 2012, however, after the earlier August 9, 2012, due date for

proposals had passed, the NGB issued Amendment 5, in which offerors were provided a

revised “price model” and instructed to “provide revisions, specifically, updated pricing

in accordance with the updated Price Model, Attachment J-3 attached hereto no later

than” midnight on September 5, 2012. AR 826. The revised price model was intended

“to facilitate evaluation of proposed prices for task orders and ceiling prices for various

labor categories,” AR 827,5 and was to be submitted electronically “in Microsoft Excel

file format.” AR 826. Questions relating to Amendment 5 were required to be submitted

no later than 4:00 p.m. on August 31, 2012. Id. As in the previous price models, the

revised price model called for offerors to calculate a Total Contract Life Price (TCLP).

“Offerors are advised that the TCLP as determined by the price model formulas will be

used for the purpose of price evaluation only . . .” AR 828.

Additionally, Amendment 5 provided:

Any explanatory pricing notes shall be provided on a

separate PDF document. Pricing notes should be limited to

explanation of details not readily discernible from the price

model and shall not contain qualifications or options which

could result in a change of price or lack of clarity as to the

offeror’s proposed price as the price model and the TCLP

calculated by the price model will be the only price

evaluated.

Id.

On September 1, 2012, the NGB issued Amendment 6, providing a second

revision to the price model, with a cover email stating, “The attached amendment

revising [sic] providing responses to offeror questions and additional corrections to the

price model for this solicitation is hereby issued.” AR 830. Amendment 6 included a

5

This language from Amendment 5 is almost a verbatim repetition of similar instructions in Amendment

2, posted on July 28, 2012: “Offeror’s [sic] are required to submit the attached Price Model (Attachment J-

3) to facilitate evaluation of its proposed prices for task orders and ceiling prices for various labor

categories.” AR 603.

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question and response table for questions apparently submitted in accordance to the

instructions of Amendment 5. AR 842. A question posed by OCI, see AR 6235, was:

Is the Government requesting that contractors transfer all

information from their finalized price quote (submitted on

August 9th, 2012) into the newly updated spreadsheet

format? If this is not the case, does this mean the

Government is providing contractors with the option of

recalculating and resubmitting a new price quote other than

what was required to be calculated and submitted by

August 9th?

The agency’s response in the table incorporated within Amendment 6 was:

Offerors are permitted to recalculate price as they see fit

and are advised to ensure proposed prices comply with all

requirements of the most recently provided amendments

and any updated appendices found therein. Offerors may

provide additional detail not originally provided as they see

fit in order to ensure the Government has sufficient basis to

determine reasonableness and realism of proposed prices.

AR 842.

On September 4, 2012, the NGB issued yet another amendment to the pricing

model, Amendment 7, which advised, “On tab II.b TCLP, cell ‘G25’ should read as:

=’II.a – Ceiling Rates ‘!C9. For expediency, you may wish to modify the current price

model that you are working with as it is no [sic] locked like the original version of the

file.” Offerors needing additional clarification were directed to contact the NGB

contracting officer by email, “though I cannot guarantee a response prior to the time

revisions are due.” AR 6243.

OCI avers that it “attempted to insert the new rates into the updated excel

spreadsheet provided by the Agency in Amendment 7.” Pl.’s Mot. at 7. Just prior to its

submission of its revised and final price proposal on September 5, 2012, OCI

encountered, however, what it characterizes as “calculation errors” still remaining in the

spreadsheet.” Id. It asserts that it attempted to advise the Contracting Officer, but the

AR reflects only an ambiguous email on the afternoon of September 5, 2012, from OCI

to the NGB: “This message serves as notification that we had an error in migrating data

from the original pricing spreadsheet to the most recent version amended yesterday and

our revised pricing model is forthcoming.” AR 6199.

In its final submission, OCI’s price model provided a TCLP of $265,619,111.06.

AR 4703. In its motion for judgment on the AR, OCI claims, however, that the price

model itself utilized an erroneous formula to determine the TCLP, because the price

model’s TCLP failed to take into account variable labor rates based on geographic

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regions and instead relied on ceiling rates for several labor categories. Pl.’s Mot. at 15.

Thus, OCI argues that its price model TCLP was “artificially inflated” compared to

OCI’s independent, off-price model total price of $199,444.166.45 “based on actual labor

rates OCI offered for each of the various labor categories by geographic regions.” Id. at

14.

Therefore, just below the price model’s field indicating OCI’s TCLP of

$265,619,111.06, OCI inserted its conflicting total price calculation of $199,444.166.85

into an otherwise blank section of the price model. AR 7403. Perplexingly, OCI also

provided explanatory notes stating a total price of $199,464,082.04. AR 7407.

The evaluation of the proposals was governed by the Source Selection Plan (the

Plan), issued July 5, 2012, for the Solicitation. AR 52. The Plan provided for a Source

Selection Authority (SSA), who would be the individual designated to make the ultimate

best-value decision. AR 81. The SSA would be advised by a Source Selection Advisory

Council (SSAC), who would represent specific functional areas from which the SSA

would require expertise. AR 82. The performance of “a comprehensive review and

evaluation of proposals against the RFP requirements and the approved evaluation

criteria” was to be principally the task of a Source Selection Evaluation Board (SSEB).6

AR 84. The Plan prescribed an adjectival rating scale – Outstanding, Good, Acceptable,

Marginal, and Unacceptable – to be used to evaluate the Mission Capability and Small

Business Participation factors. AR 62. It also provided, however, “To receive

consideration for award, an offer must receive no less than an ‘Acceptable’ rating for the

Mission Capability Factor and sub-factors.” AR 57.7

The Past Performance Factor would be evaluated via a relevancy rating – ranging

from Very Relevant to Relevant, Somewhat Relevant, or Not Relevant. AR 63. An

overall past performance confidence assessment rating would also then be assigned,

ranging from Substantial Confidence to Satisfactory Confidence, Limited Confidence, or

No Confidence. Id. The SSEB completed its report on September 7, 2012. AR 5436 –

5545.

OCI’s proposal received a rating of “Marginal” on Mission Capability. AR 5494.

It received a “Good” rating on Small Business Participation. AR 5505.

OCI’s rating of “Marginal” on Mission Capability as a whole was reflected in

similar “Marginal” ratings on both of the Mission Capability sub-factors. On the first

sub-factor, Overall Capability, the evaluators found “7 noted strengths” but that they

were “insufficient to offset the increased risk inherent in” 11 noted weaknesses. AR

5495. The evaluation detailed these strengths and weaknesses in detail in the context of

6

One of the three members of the SSEB was Lt. Col. David Bringhurst, see AR 5436, who was also a

participant in the meeting during which OCI was criticized by agency personnel for its handling of the Dr.

Zeiger matter, according to the Post Meeting Report.

7

A “Marginal” rating was described as: “Proposal does not clearly meet requirements and has not

demonstrated an adequate approach and understanding of the requirements. The proposal has one or more

weaknesses which are not offset by strengths. Risk of unsuccessful performance is high.” AR 62.

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the elements of Corporate Experience, Corporate Resources, Continuous Quality

Improvement Plan, and Quality Control Plan. For example, weaknesses in Corporate

Experience were “the limited depth of similar experience presented” (“the only apparent

behavioral health experience specifically being the previous ANG DPH contract”),

failure to “articulate clearly how they were effective in developing a resolution, plan of

action or tracking lessons learned,” a “weak” description of corporate management (e.g.,

proposing email and weekly activity reports rather than simple conference calls), and

reactive rather than proactive “identification and rectification of areas of risk.” Id.

Weaknesses under Corporate Resources were identified as the “lack of awareness of the

benefits available to traditional Service Members” (“oversimplifying the spectrum of

resources available and the need to address benefits on a case by case basis”), a limited

provider network described as “a risk in terms of both the size of network and the direct

access approach,” and a data tracking and reporting methods plan viewed as “lacking

substance” (“The offeror does not appear to understand the depth of scope for the

requirement and proposes no behavioral health data elements under Subfactor One

Corporate Resources”). AR 5496.

Two weaknesses were noted with respect to Continuous Quality Improvement: no

plan “ready to be implemented” and failure to propose performance indicators. These

weaknesses suggested to the SSEB that “the plan is a textbook description with no

tailored plan for the National Guard.” Id. As to Quality Control, OCI merely described

“roles and procedures in lieu of details” and, though citing Quality Control “metrics,”

failed to identify metrics specific to the National Guard. Id. at 5496-97. It also made no

mention of “Primary Source Verification.” Id.

OCI was also given a rating of Marginal on sub-factor 2 regarding

“Representative Tasks 1 & 2 – ANG & ARNG DPH Support Tasks” (“Representative

Tasks”). AR 5500. For this sub-factor, the proposal was to address the offeror’s

proposed solution to certain tasks, including such elements as its Task Execution

Approach, Key Personnel, and Transition/Staffing Plan. AR 70-71. As with sub-factor

1, the SSEB itemized 12 weaknesses that were not offset by 6 noted strengths of the

proposal.8 AR 5501-02. For example, the evaluation board questioned OCI’s

population-based regional distribution plan because of its “potential to lead to confusion,”

its proposal for a “project charter” which risked “time lost toward implantation,” an

“ANG [-]centric Task Execution approach” which suggested a risk to ARNG task

execution, its outline for Affiliate Liability Insurance demonstrating inadequate

“understanding of the Mental Health field,” its unfeasible approach to the availability of

Traumatic Event Management response teams, and miscellaneous services too generic

and not specific to ARNG. In addition, the SSEB found that proposed ANG and ARNG

Directors “do not meet the minimum requirements, did not find “sufficient depth” in

OCI’s plan for ARNG transition, and faulted the proposal’s repeated “Wing” references

as inapplicable to ARNG concerns. AR 5500-01. The evaluation concluded, “Overall,

though the Board feels the offeror could potentially perform the required services, it

8

Although the opening paragraph of the SSEB “Supporting Rationale” for this sub-factor cited 6 strengths

and 11 weaknesses, the itemization of weaknesses that followed the textual description numbered 12

weaknesses. Compare AR 5500 with AR 5501-02.

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would likely have significant issues during implementation and throughout performance,

presenting a high risk to the Government.” AR 5501.

On Past Performance, however, OCI was given a rating of “Somewhat Relevant”:

Upon reviewing all three contracts submitted for past

performance for offeror 09C4, there was relevancy in the

ANG DPH contract covering one half of the Nation from a

capability standpoint. The other two contracts presented

medical readiness/LOD determination which was

somewhat relevant for a medical model but no specific

experienced [sic] tied to a psychological health program

was sited [sic] hence the overall rating of Somewhat

Relevant for past performance.

AR 5503.

With respect to confidence assessment, OCI was given a “Limited Confidence”

rating by the SSEB. While the SSEB credited OCI with having provided “one example”

of a project of similar scope, related to “mild adjustment disorders,” it considered OCI’s

other two examples, relating to medical support services in general, physician

deployment scheduling, and medical readiness support services, as not demonstrating “a

behavioral health focus.” Id. Furthermore, the SSEB noted, “Based on the offeror’s

recent/relevant performance record, the Government has a low expectation that the

offeror will successfully perform the required effort.” Id. The context of this SSEB

comment is reflected in the additional observation in the report:

However, one of the reviewers had prior experience with

the offeror related to the ANG Psychological Health

Program, and found the [sic] there were problems with

project management and handling personnel, both of which

are not accurate, as this company has struggled with

meeting performance objectives and managing personnel.

Id.

These comments and the “Limited Confidence” rating clearly were based on the

“Dr. Zieger matter” as it arose in the course of OCI’s performance on the pilot project.

With respect to price, the Source Selection Plan established a Price Evaluation

Team (PET) charged with providing a Price Analysis to the SSAC and to the Source

Selection Authority. AR 5546, 5571. The PET evaluated each offeror’s TCLP and

determined “whether the Offerors have completed all aspects of the price proposal

properly and whether the amounts listed in the price proposal are calculated accurately.”

AR 5547. The price evaluation process did not employ adjectival ratings. Id. The steps

involved included a comparison of each offeror’s total price with other offeror’s proposed

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prices, comparison with the agency’s own Independent Government Cost Estimate

(IGCE), review of each proposal for completeness, reasonableness, and realism, and

consideration of any other significant items of concern. AR 5548.

OCI’s proposal was judged complete, but that “additional notes which could not

be interpreted were included on the worksheets and the offeror added additional

Emergency Affiliate Provider (EAP) costs to the firm-fixed price for DPH services.” AR

5555. The PET did not adjudge OCI’s proposal as “fair and reasonable when compared

to other prices received” in response to the RFP. It noted in particular that OCI’s TCLP

of $265,619,111.06 was the “highest proposed”: 37.36% above the government estimate

and 51.17% above the average of all the offerors. Id. OCI’s prices were not determined

to be unrealistic, but that its “extremely high price and labor rates may reflect an unclear

understanding of the requirement.” Id.

The SSAC reported that OCI in effect had taken “exception” to the Government’s

price model, but that the PET had “verified the propriety of all formulas in the submitted

price model and found that the calculated price of $265,619,111.06 was determined on

the same basis as all other offerors’ TCLP and therefore the only valid figure for

evaluation.” AR 5701. Furthermore, the SSAC advised, albeit merely summarily, that

“if the Government were to consider all offerors based on a similar construct to that used

by [OCI], its price would still be the highest evaluated.” Id. It concluded,

Whether this offeror’s evaluated price was

$199,464,082.04 or $265,619,111.06 makes no difference

in the recommendation to exclude the offeror from the

competitive range, as the offerors [sic] rating of ‘Marginal’

for Factor 1, and the constituent discriminators on which

this rating was based could not be mitigated by even the

lower price the offeror specified.

Id.

The SSAC recommended that a competitive range be established limited only to

the four most highly rated proposals, “each of which was rated ‘Good’ or above for

Factor 1,” Mission Capability, which was the most important of all the ratable factors.

Id. “Here a clean break exists between the most highly rated proposals and those not

among the most highly rated. Furthermore as the acquisition strategy states an intended

target of 2-3 awardees, the 4 most highly rated proposals represent an efficient quantity at

which competition may be conducted and awardees selected.” Id. Goldbelt, Intervenor-

Defendant in the case at bar, was one of the four offerors whose proposals were deemed

to fall within the competitive range. AR 5752.

On September 17, 2012, OCI was informed by letter that its proposal was

determined to fall outside the competitive range. AR 6815. On September 20, 2012,

OCI filed a bid protest at the Government Accountability Office (GAO) protesting its

exclusion from the competitive range. AR 6384. OCI alleged that the NGB’s had based

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its determination on “erroneous pricing information.” AR 6389. “The Agency claimed

that the price quoted by OCI was for $265,619,111.06. This is false. In actuality, the

OCI price expressly quoted and submitted to the Agency for review was

$199,464,082.04.” AR 6390. OCI blamed the NGB’s “malfunctioning pricing

spreadsheet” and the agency’s failure to credit the explanation that OCI had provided in

its submission. Id.

GAO denied OCI’s protest on December 28, 2012. AR 6427. It noted that OCI

had submitted multiple total prices, but that “the agency reasonably evaluated

Optimization’s price proposal in a manner consistent with the RFP.” AR 6434. The

agency had explicitly advised that an offeror’s TCLP would be evaluated “based only” on

the price model and that, despite OCI’s assertion that the price model contained formula

errors, “the protester has not identified any such errors or shown how its final revised

$266 million price was miscalculated.” Id. The GAO decision also addressed OCI’s

challenges to the NGB’s evaluation of its proposal under the mission capability factor

(apparently raised in a supplemental protest9). AR 6435. “We find that [Optimization’s

arguments] largely reflect the protestor’s disagreement with the agency’s technical

evaluation, and offer no basis to sustain the protest.” Id.

Although the protester may disagree with the agency’s

evaluation of its mission capability proposal, the record

demonstrates that the SSEB and the CO considered all of

the information submitted by offerors and available to the

agency, and issued a well-reasoned and rational evaluation

report and competitive range determination that extensively

highlighted key discriminators between Optimization’s and

other offerors’ proposals.

AR 6436.

The GAO decision concluded, “In sum, Optimization has not shown that the

agency’s evaluation of its price and mission capability proposals was unreasonable or

inconsistent with the RFP, and the protestor’s disagreement with the agency’s judgment

does not establish that the agency acted unreasonably.” AR 6437.

II. Legal Standards

A. Standing

The Court of Federal Claims has jurisdiction under the Tucker Act to render

judgment in actions by an interested party challenging the award of a contract in

connection with a procurement. 28 U.S.C. § 1491(b)(1); EREH Phase I LLC v. United

States, 95 Fed. Cl. 108, 112 (2010). In its cross-motion for judgment on the AR,

9

Although OCI’s supplemental protest to GAO raised a challenge to the NGB’s evaluation on mission

capability, it evidently did not challenge before the GAO, unlike here, its rating on past performance. AR

6435, n.18.

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however, the Government argues that the court lacks jurisdiction to entertain Plaintiff’s

complaint because Plaintiff lacks standing to bring its protest. Standing is clearly a

“threshold” jurisdictional requirement. Myers Investigative and Security Services, Inc., v.

United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002). Furthermore, “[t]he party invoking

federal jurisdiction bears the burden of establishing [the] elements [of standing.]” Id.

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

“In essence the question of standing is whether the litigant is entitled to have the

court decide the merits of the dispute . . .” Warth v. Seldin, 422 U.S. 490, 498 (1975).

The reason for this threshold inquiry is to respect “both constitutional limitations on

federal-court jurisdiction and prudential limitations on its exercise.” Id. There are three

elements of standing: 1) a plaintiff must show that it has suffered an “injury in fact” that

is “concrete and particularized” and “actual or imminent, not conjectural or

hypothetical”; 2) injury must be “fairly traceable” to the action of the defendant; and 3)

“it is likely, as opposed to merely speculative, that the injury will be redressed by a

favorable decision.” Magnum Opus Techs., Inc. v. United States, 94 Fed. Cl. 512, 528

(2010) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Serv., Inc., 528 U.S. 167, 180-

81 (2000). The requirement of standing on a bid protest in the Court of Federal Claims,

however, is even more particular. “In this court, plaintiffs face the further hurdle of

statutory standing.” Magnum Opus, 94 Fed. Cl. at 529.

Under the Administrative Dispute Resolution Act, plaintiffs in bid protest actions

are limited to those who are actual or prospective bidders and who can demonstrate that

they possess “a direct economic interest.” Id. (quoting Rex Serv. Corp. v. United States,

448 F.3d 1305, 1307 (Fed. Cir. 2006). The showing of “direct economic interest”

amounts to a showing of prejudice. “[T]he Federal Circuit has construed the second

element, the ‘direct economic interest’ prong, to mean that a successful protestor must

also establish that the errors complained of caused prejudice.” Textron, Inc. v. United

States, 74 Fed. Cl. 277, 283 (2006). The hurdle is not trivial. “[A] bid protester must

have a substantial chance of receiving an award in order to have an economic interest in it

and therefore standing to file a bid protest.” Labatt Food Service, Inc. v. United States,

577 F.3d 1375, 1379 (Fed. Cir. 2009).10

The court in Textron noted that the prejudice standard is not only an element of

standing (which is a non-merits-based inquiry, see Media Techs. Licensing, LLC v. Upper

Deck Co., 334 F.3d 1366, 1370 (Fed. Cir. 2003)), but also a required showing in a later

stage, merits-based determination warranting injunctive relief. Textron, 74 Fed. Cl. at

284.11 It cautioned accordingly against “a round-robin through the arguments on the

merits in order to resolve a jurisdictional issue. Such is not a desirable or appropriate

10

The court notes that decisions in this court and in the Federal Circuit have variously referred to plaintiffs

in bid protests as “protesters” or “protestors.” This court will employ the latter spelling, except where

citing the former in a quotation.

11

“This court thus looks twice at prejudice, first weighing prejudice as it pertains to standing, and then

more thoroughly weighing prejudice to determine whether a plaintiff shall be afforded relief.” L-3 Global

Comunications Solutions, Inc. v. United States, 82 Fed. Cl. 604, 608 n.4 (2008).

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procedure.” Id. at 284-85.12 To thread its way carefully through this dual-stage inquiry,

it adopted an approach to standing focusing on the status of the protestor and avoiding the

parties’ arguments on the merits: a protestor would have standing only if it was

(1) either a bidder or proposer that has been prevented from

bidding or proposing due to some infraction other than the

terms of the solicitation itself; or (2) either a bidder or

proposer who would be in contention absent an

unreasonable procurement decision or violation of

applicable procurement regulations.

Id. at 285 (emphasis added). Accord Bilfinger Berger AG Sede Secondaria Italiana v.

United States, 97 Fed. Cl. 96, 135 (2010).

In a similar vein, the court in Night Vision Corp. v. United States, 68 Fed. Cl. 368,

391, 392 & n. 23 (2005), characterized the prejudice inquiry for purposes of assessing

standing as a “limited review” in search of the “minimum requisite evidence” of injury

to a protestor’s “substantial chance of obtaining the contract, assuming that the

protestor’s substantive allegations bear out.” Nevertheless, if, despite the alleged

procurement error, the protestor would still not have been “in contention” or still had a

“substantial chance” of obtaining the contract, then the protestor has not been prejudiced

and lacks standing. “Without a showing of harm specific to the asserted error, there is no

injury to redress, and no standing to sue.” Labatt, 577 F.3d at 1381.

Another approach to viewing the two distinct applications of the prejudice inquiry

was addressed in L-3 Commc’ns Corp. v. United States: “The difference between the two

[prejudice standards] is that the prejudice determination for purposes of standing assumes

all non-frivolous allegations to be true, whereas the post-merits prejudice determination is

based only on those allegations which have been proven to be true.” L-3 Commc’ns

Corp. v. United States, 99 Fed. Cl. 283, 289 (2011).

In Plaintiff’s motion for judgment on the administrative record, the gravamen of

its complaint is that the NGB erred in its evaluation of OCI’s proposal with respect to: 1)

price (“the Government’s reliance on the artificially inflated $265,619,111.06 ‘price’ is

thus improper,” Pl.’s Mot. at 1) and 2) past performance (“The Agency’s past

performance evaluation is not reasonably supported by the record, nor is it in accordance

with the Solicitation’s evaluation criteria,” id. at 18). OCI further alleges that its past

performance evaluation was “skewed” by the agency’s animus towards OCI relating back

to the Dr. Zeiger matter during the pilot project. Id. at 1, 26-28.

12

The court in Magnum Opus similarly observed that, because a plaintiff’s failure to establish standing

precludes a ruling on the merits, the corollary is that a plaintiff cannot be required “to prove the merits of

its case in order to demonstrate standing.” Magnum Opus, 94 Fed. Cl. at 530 n.12. In Archura LLC v.

United States, on the other hand, the court observed, “In some cases, however, the analyses become

intertwined, such that consideration of the merits will relate back to the initial standing inquiry.” 112 Fed.

Cl. 487, 497 (2013) (citing Comint Sys. v. United States, 700 F.3d 1377, 1384 (Fed. Cir. 2012).

-12-

B. Bid Protest Standard of Review

Under the Tucker Act, the Court of Federal Claims reviews the agency’s decision

in a bid protest “pursuant to the standards set forth in section 706 of title 5” of the

Administrative Procedure Act (APA) (5 U.S.C. §§ 551-559, 701-706). 28 U.S.C. §

1491(b)(4). Under the APA, the inquiry is whether the agency’s action is “arbitrary,

capricious, an abuse of discretion, or otherwise contrary to law” or “without observance

of procedure required by law.” 5 U.S.C. § 706(2). The Federal Circuit has described the

standard of review as whether the procurement decision “lacked a rational basis” or

“involved a violation of regulation or procedure.” Impresa Construzioni Geom.

Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001); see also Med.

Devel. Int’l, Inc. v United States, 89 Fed. Cl. 691, 700 (2009). For a determination

whether the decision had a rational basis, the scope of review is narrow: “The Court will

look to see if an agency ‘examine[d] the relevant data and articulate[d] a satisfactory

explanation for its action.” Gulf Group Inc. v. United States, 61 Fed. Cl. 338, 351 (2004)

(quoting Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 20, 43 (1983). When the protest alleges a violation of regulation or

procedure, the disappointed bidder must show that the violation was “clear and

prejudicial.” Impresa, 238 F.3d at 1333.

The protestor bears a “heavy burden” of showing that the award decision had no

rational basis. Id. The burden is even higher in a “best value” procurement.

“Procurement officials have substantial discretion to determine which proposal represents

the best value for the government.” E. W. Bliss Co. v. United States, 77 F.3d 445, 449

(Fed. Cir. 1996); Galen Med. Asso., Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir.

2004) (“the contracting officer ha[s] even greater discretion than if the contract were to

have been awarded on the basis of cost alone”). “And in cases such as this, when a

negotiated procurement is involved and at issue is a performance evaluation, the greatest

deference possible is given to the agency – what our Court has called a ‘triple whammy

of deference.” Gulf Group, 61 Fed. Cl. at 351 (citing Overstreet Electric Co. v. United

States, 59 Fed. Cl. 99, 117 (2003)).

Procedurally, the court proceeds in “two steps.” Bannum, Inc. v. United States,

404 F.3d 1346, 1351 (Fed. Cir. 2005). “First . . . the trial court determines whether the

government acted without rational basis or contrary to law when evaluating the bids and

awarding the contract. Second . . . if the trial court finds that the government’s conduct

fails the APA review . . . then it proceeds to determine, as a factual matter, if the bid

protester was prejudiced by that conduct.”13 Id. In a post-award bid protest, such as here,

the plaintiff must demonstrate that the errors in the procurement process “significantly

prejudiced” it. Id. at 1353. “To establish ‘significant prejudice’ [the plaintiff] must show

that there was a ‘substantial chance’ it would have received the contract award but for the

errors . . .” Id. (citations omitted).

Pursuant to Rule 52.1(b) of the Rules of the Court of Federal Claims (RCFC), the

court considers the parties’ cross-motions for judgment on the administrative record as

13

This is the second, merits-based prejudice inquiry to which the court referred in Textron, supra.

-13-

“akin to an expedited trial on the paper record.” L-3 Global Commc‘ns Solutions, Inc.,

82 Fed. Cl. 604, 608 (2008). The court inquires whether a party has met its burden of

proof, and makes fact determinations as necessary, based on the existing administrative

record. Id. at 607-608; Bannum, 404 F.3d at 1356.

III. Discussion

A. Supplementing the Administrative Record

Underlying much of OCI’s complaint and motion for judgment is its allegation

that OCI’s past performance rating “appears to be entirely based on OCI’s decision to

terminate one of its employees, Ms. Zeiger, who was apparently a former colleague and

friend of members of the evaluation team, rather than any issues with OCI’s actual

performance under the [pilot] contract.” Pl.’s Mem. at 20. OCI asserts that its evaluation

was “improperly skewed” by Lt. Col. Bringhurst’s “affinity towards” Dr. Zeiger, id. at 1,

complains of a “lack of objectivity,” “personal animosity,” and “Government ill-

sentiment” that operated “to the prejudice of OCI,” id. at 2, and accordingly argues that

the Government violated the implied covenant of good faith and fair dealing to which it is

bound in evaluating a bidder’s proposal. Id. at 28.

In addition, OCI complains that the utilization by the NGB of a contract

employee, Karen Klepadlo, to assist in the Solicitation “tainted the entire procurement

process” in favor of Goldbelt Glacier. Pl.’s Mem. at 29-30. Ms. Klepadlo is an

employee of Alutiiq, a subsidiary of Afognak Native Corporation, an Alaskan Native

Corporation (ANC).14 Prior to her employment with Alutiiq, she had worked for

TCoombs & Associates, LLC, whose website identifies Goldbelt Wolf as one of its

“Manufacturer and Security Services Partners.” Pl.’s Mem. at 29; Def.’s Mot. at 27.

Goldbelt Wolf is a “sister-company” of Goldbelt Glacier, the Intervenor-Defendant here,

as both are subsidiaries of a parent company, Goldbelt, Inc. Among other assignments,

Ms. Klepadlo assisted Capt. Joan F. Hunter, the Chair of the SSEB, AR 2, and prepared

the Independent Government Cost Estimate. AR 5547. OCI alleges that actions of Ms.

Klepadlo “compromised the integrity of the procurement and caused OCI irreparable

harm as key employees were encouraged to move to OCI’s competitors before an award

determination had even been made,” Pl.’s Mem. at 29, referring to an email that Ms.

Klepadlo sent out on July 30, 2012, for distribution to “State and Wing DPH Program”

personnel. AR 6609-10.

In support of the allegations of bias against OCI, OCI filed what it described as a

“Declaration of Harm,” Docket # 29, a declaration of its Chief Operations Officer,

Richard Holmes, executed April 22, 2013 (“the Holmes Declaration”), subsequent to the

filing of its amended complaint and prior to the filing of its motion for judgment on the

administrative record. On April 29, 2013, OCI filed a motion for leave to file various

attachments that had been referenced in, but not included with, the Holmes Declaration.

These attachments, Docket # 30, consisted of a resume of Dr. Zeiger, an internal OCI

14

Neither Alutiiq nor Afognak were offerors for the solicitation at issue here.

-14-

memo to Dr. Zeiger placing her on probation in November 2011, a string of emails to and

from Dr. Zeiger referencing “glitches” regarding insurance coverage in the pilot program,

and the Post Meeting Report, that is, OCI’s summary of a meeting held May 29, 2012, to

discuss the “way ahead, concerns and plans after termination of Dr. Zeiger.”

In its cross-motion and response to OCI’s motion for judgment on the AR,

Defendant also submitted extra-record materials specifically with respect to OCI’s

complaints about the role of Ms. Klepadlo because “OCI now attempts to draw a

connection between Ms. Klepadlo and [Goldbelt Glacier].” Def.’s Mot. at 27. These

materials included a statement from Alutiiq, the NGB contracting officer’s determination

that there was no potential for an organizational conflict of interest, a declaration of Ms.

Klepadlo, Ms. Klepadlo’s resume, an Alutiiq Employee Confidentiality Agreement and

Code of Ethics and Business Conduct Responsibility Statement (both signed by Ms.

Klepadlo), and the email message sent by Ms. Klepadlo for distribution to the “State and

Wing DPH Program” managers and points of contact regarding the Solicitation process.

In the email message, Ms. Klepadlo wrote:

The intent is to educate our staff members on the

contracting and transition process and to offer a forum for

communication regarding any concerns they may have

regarding the upcoming contract award. . . As you may

know, a Solicitation has been released . . . I invite each of

you to familiarize yourselves with the Solicitation process. .

. It is good business practice that current staff members in

good standing will be offered ‘First Right of Refusal’ for

the position which they currently hold, should a new

company win the contract award. I do however, encourage

you to visit the interested vendor’s websites and apply on

their career pages for your position of interest. This aids

the transition process along and ensures that each company

knows that you have an ongoing interest in a position with

the program.

AR 6609-10.

Generally, as the Federal Circuit has noted, “‘the focal point for judicial review

should be the administrative record already in existence, not some new record made

initially in the reviewing court.’” Axiom Resource Management, Inc. v. United States,

564 F.3d 1374, 1379 (Fed. Cir. 2009) (quoting Camp v. Pitts, 411 U.S. 138, 142 (1973)).

In Axiom, it was emphasized that the reviewing court is tasked with applying

Administrative Procedure Act standards to the agency decision “based on the record”

presented by the agency. Id. “The purpose of limiting review to the record actually

before the agency is to guard against courts using new evidence to ‘convert the “arbitrary

and capricious” standard into effectively de novo review.’” Id. at 1380 (quoting

Murakami v. United States, 46 Fed. Cl 731, 735 (2000), aff’d, 398 F.3d 1342 (Fed. Cir.

2005).

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Accordingly, supplementation of the administrative record should only be allowed

in circumstances where ‘“the omission of extra-record evidence precludes effective

judicial review.’” Id. The Federal Circuit elaborated that supplementation may be

warranted “if the existing record is insufficient to permit meaningful review consistent

with the APA.” Id. at 1381. One example of an insufficient record would be where there

is a “strong showing or bad faith or improper behavior” by agency officials such that

“effective judicial review” requires “examining the examiners themselves.” Citizens to

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971), overruled on other

grounds by Califano v. Sanders, 430 U.S. 99 (1977). Applying these considerations, the

Court of Federal Claims has appropriately reasoned that supplementing the AR may be

necessary in order to prove wrongdoing by an agency:

Allegations of bias, prejudice and bad faith . . . which

depend upon a Government official’s past conduct toward a

bidder necessarily cannot be subsumed within the record of

a challenged award decision.

Int’l Res. Recovery, Inc. v. United States, 61 Fed. Cl. 38, 41-42 (2004).

Such allegations of bias and prejudice, however, cannot rest merely on “argument,

suspicion, or conjecture.” Office Depot, Inc. v. United States, 94 Fed. Cl. 294 (2010).

Absent a threshold showing, “a plaintiff[‘]s bare allegations of bad faith are insufficient

to place the issue or the proffered extra-record evidence before the court.” Id. at 297

(quoting Madison Servs., Inc. v. United States, 92 Fed. Cl., 120, 130 (2010). Rather,

courts have described the required threshold determination as that of being “well

grounded,” L-3 Comm. Integrated Sys. v. United States, 91 Fed. Cl. 347, 354 (2010), “a

reasonable factual predicate,” id. at 355, “an evidentiary foundation,” Pitney Bowes Gov’t

Solutions, Inc. v. United States, 93 Fed. Cl. 327, 332 (2010), or “a strong evidentiary

footing,” Beta Analytics Int’l, Inc. v. United States, 61 Fed. Cl. 223, 226 (2004) (“to put

facts relating to bad faith in play a plaintiff must first make a threshold showing of either

a motivation for the Government employee in question to have acted in bad faith or

conduct that is hard to explain absent bad faith”).

The decision on supplementation is distinct from a decision on the merits of the

allegation of bias. “The burden of proof required for supplementing the administrative

record is lower than that required for demonstrating bad faith or bias on the merits.”

Pitney Bowes, 93 Fed. Cl. at 332. As noted, the test for supplementation is “whether

there are sufficient well-grounded allegations of bias to support an inquiry.” Id. On the

other hand, to overcome an agency decision’s presumption of good faith, “the proof must

be almost ‘irrefragable.’” Spezzaferro v. Fed. Aviation Admin., 807 F.2d 169, 172 (Fed.

Cir. 1986).

The thrust of OCI’s allegation of bias is that NGB personnel had an affinity in

favor of Dr. Zeiger, alleging that she “was apparently a former colleague and friend of

members of the evaluation team,” Pl.’s Mem. at 20, developed an “animosity,” id. at 2,

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against OCI because OCI had replaced Dr. Zeiger in the pilot project, and that the

Government’s “ill-sentiment carried over into the evaluation of OCI in the instant

Solicitation.” Id. The Holmes Declaration recites that the agency had suggested that OCI

hire Dr. Zeiger to replace OCI’s original National Director of Psychological Health

whom the Government had directed be removed by OCI three months into the pilot

program (and alleges that “an extensive personal history” existed between Dr. Zeiger and

an agency contracting official, Col. Jane Klingenberger); that OCI had thereafter

documented several incidents of Dr. Zeiger’s poor judgment, including one in which OCI

alleges Dr. Zeiger stated in a regional conference call, “I do not think OCI should get the

new contract and I will see to it that they don’t”; that OCI had terminated Dr. Zeiger after

having placed her on a performance improvement plan; that the agency had convened a

meeting with OCI to discuss Dr. Zeiger’s termination; and that during the meeting, Col.

Jane Klingenberger “threatened” OCI, stating that OCI “should not be surprised to one

day be working for Dr. Zeiger.” Mr. Holmes avers that OCI construed Col.

Klingenberg’s statement as a threat to OCI bid for an award under the instant Solicitation.

The Holmes Declaration also asserts that “[a] true copy of the meeting minutes is

included at Attachment 2.”

The “minutes” referenced in the Holmes Declaration are the “Post Meeting

Report,” compiled by OCI. The Report recites the date of May 29, 2012, although it is

uncertain whether that date is the date of the meeting or the date on which the account of

the meeting was compiled. The Report first lists the meeting participants, including,

among others, Mr. Holmes, Lt. Col. Bringhurst, and Col. Klingenberger; it then provides

what is described as “Meeting Minutes”; and it concludes with a listing of “Outstanding

Action Items.” The court notes that there is no indication of who took notes of the

meeting or whether the meeting was recorded or when the “minutes” were compiled.

Despite the description of the meeting discussion as “minutes,” there is no indication that

they were ever even seen prior to this litigation by the NGB, much less whether the NGB

ever agreed with this account, despite a selection of boxes of the Report to indicate

“Approved,” “Disapproved,” or “Pending.”15 Yet the Holmes Declaration describes them

as a “true copy of the meeting minutes.”

The “minutes” recite that “Col Klingenberger stated that OCI should have

submitted a Contingency Plan prior to terming [sic] Zeiger. This could not have come at

a worse time.” “Col. Klingenberger advised Mr. Holmes that he was “Not earning any

brownie points with the ANG, as it seemed he was ‘Throwing Dr. Zeiger under a bus.’”

“Col. Bringhurst expressed that the ANG did not know Ms. Zeiger was on a Performance

Improvement Plan and they should have been notified.” “Col. Klingenberger stated that

the ANGRC is the customer, and they should have been made aware of decision. She

stated that OCI should not be surprised to run into Ms. Zeiger again. Ms. Zeiger may

come back in a Government Position, and OCI will be working for her. If this happens, it

will be a direct result of how OCI went about terminating Ms. Zeiger.” “Col.

Klingenberger advised that Zeiger has been of great assistance to her personally.” “Col.

15

As a term under parliamentary law, “minutes” is defined in Black’s Law Dictionary as “[t]he formal

record of a deliberative assembly’s proceedings, approved (as corrected, if necessary) by the assembly.”

Black’s Law Dictionary 1018 (8th ed. 2004).

-17-

Staresina clarified that he had no attachment connection to Ms. Zeiger. His statements

were to emphasize the importance of notifying the client when replacing Key Personnel.”

“Col. Klingenberger advised that . . . switch of PM has to be choreographed to make for a

‘win win’ situation for the government. Although it appears Ms. Zeiger was causing

internal issues that the government was not experiencing.” “Col. Klingenberger stated

that the reason we were ‘beating that dead horse’ is that we have 90 people showing at

the Readiness Frontiers and a Secretary of Defense; Zeiger is well regarded among many

of the 90 personnel on the contract . . . perhaps not all of the personnel were as fond of

Ms. Zeiger as previously thought. She also stated that in light of the new information

provided, Ms. Zeiger might not be reappearing in a Government capacity.” “Col.

Bringhurst reiterated that it was a huge disappointment because the termination came out

of the blue; overall, Ms. Zeiger’s work was stellar; the ANG had no concept that her

leadership may have impacted the other terminations; all they saw was stellar work.”

“Col. Klingenberger stated . . . From her perspective, most of the OCI DPH’s trusted Dr.

Zeiger and it is going to be a ‘blow to them.’”

The immediate question before the court with respect to supplementation of the

Administrative Record by the addition of the Holmes Declaration and the Post Meeting

Report is whether they are necessary to inform the court’s consideration of OCI’s claim

of bias in order to achieve effective judicial review. The Dr. Zeiger matter certainly

played a role in the evaluation of OCI’s past performance by the SSEB. The court finds

that, taken at face value, the so-called minutes suggest a sufficiently reasonable factual

predicate for OCI’s claim, at the very least to support the court’s inquiry and to warrant

allowing the documents as a supplement to the AR.

To the same extent, the court is persuaded in favor of allowing Defendant’s

proposed extra-record evidence with respect to the role of Ms. Klepadlo vis-à-vis OCI’s

claim that her participation as a contractor for the agency effected an improper “taint” in

favor of Goldbelt Glacier.

Accordingly, the court will consider all of these documents in its review of the

merits of Plaintiff’s procurement protest.

B. The Government’s Argument on Standing

The Government argues that OCI lacks standing to protest its exclusion from the

competitive range for two reasons. First, with respect to price, it argues that, by failing to

file a pre-award protest against the price model set forth in the Solicitation, OCI has

“waived any objection to the NGB’s use of the solicitation’s price model to calculate and

evaluate the total price that the NGB would consider in evaluating” bidders’ proposals.

Def.’s Mot. at 9.

Second, it argues that OCI’s failure to contest the “marginal” rating it received as

to Factor I, Mission Capability, or either of its sub-factors, Overall Capability (sub-factor

1) and Representative Tasks (sub-factor 2), rendered its proposal as not being within the

competitive range. Id. at 12. By virtue of its elimination from the competitive range on

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this basis alone, given the requirement that “[t]o receive consideration for award, an offer

must receive no less than an ‘Acceptable’ rating for the Mission Capability Factor and

sub-factors,” AR 57, “OCI cannot meet its burden to establish that, but for specific errors,

it had a ‘substantial chance’ of winning the contract.” Def.’s Mot. at 12. Accordingly,

the Government argues, “OCI thus would have still been excluded from the competitive

range even if the NGB had calculated OCI’s price in the manner that OCI now contends

the solicitation required.” Id. at 13 (citing AR 5883-84).

1. Price

As the Government argues, the gravamen of OCI’s complaint regarding price is

its objection to the NGB’s use of a price model, specifically the calculation of its TCLP,

rather than what OCI considers the more meaningful price based on “the probable cost.”

See Pl.’s Mem. at 14 (citing AR 991-92). Plaintiff avers that “the pricing model . . . does

not accurately reflect what the Government will actually pay.” Id. at 15. Thus, because

the pricing model “is based on ceiling pricing for each labor category that fails to

consider the pricing actually proposed,” OCI’s TCLP of $265,619,111.06 did not

constitute “the probable cost to the Government.” Id. at 1.

OCI’s explanation for the disparity of its “overstated” TCLP of $265 million

compared to its “correct” total price of $199 million is that the agency’s price model used

“ceiling rates” to calculate the total price, “causing a calculation error drastically skewing

OCI’s proposed quote.” Id. at 8. OCI contends that the ceiling rates, however, “were

applicable to only the highest cost of living areas in the country and were not intended as

a universal rate to be applied across the entire contract.” Id.

In effect, then, the Government is correct in characterizing OCI’s position as a

concession that the NGB properly calculated OCI’s total price utilizing the price model.

The Government reasons that the Solicitation manifestly provided that the NGB would

evaluate offerors’ proposals based upon “total contract life price to be determine[d] based

upon the price model set forth reflecting the proposed prices for the two sample tasks, the

fixed-price contract line items (CLIN), and the ceiling (or maximum) hourly rates for

seven required labor categories.” Def.’s Mot. at 10. Accordingly, the Government

argues that OCI’s failure to protest the terms of the Solicitation waives any present

objection based on price.

In Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir.), the

court held that “a party who had the opportunity to object to the terms of a government

solicitation containing a patent error and fails to do so prior to the close of the bidding

process waives its ability to raise the same objection subsequently in a bid protest action

in the Court of Federal Claims.” The court recognized analogous doctrines of laches and

equitable estoppel in developing its waiver rule:

In the absence of a waiver rule, a contractor with

knowledge of a solicitation defect could choose to stay

silent when submitting its first proposal. If its first

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proposal loses to another bidder, the contractor could then

come forward with the defect to restart the bidding process,

perhaps with increased knowledge of its competitors. A

waiver rule thus prevents contractors from taking

advantage of the government and other bidders, and avoids

costly after-the-fact litigation.

Id. at 1314.

In other words, “‘[v]endors cannot sit on their rights to challenge what they

believe is an unfair solicitation, roll the dice and see if they receive award [sic] and then,

if unsuccessful, claim the solicitation was infirm.’’” Id. (quoting Argencord Mach. &

Equip., Inc. v. United States, 68 Fed. Cl. 167, 175 n.14 (2005).

Yet it is plain that OCI submitted two vastly different price totals, then sat on its

hands awaiting whether it would be successful in its bid in any event. As Defendant

points out, the Solicitation plainly provided that offerors’ proposals would be evaluated

based on the TCLP, which in turn was to be based on the price model “reflecting the

proposed prices for the two sample tasks, the fixed-price contract line items (CLIN), and

the ceiling (or maximum) hourly rates for seven required labor categories.” Def.’s Mot.

at 10; AR 1991-02, RFP amend. 2, at 73-74; see also AR 827-28, RFP amend. 5 at 2-3.

Sample Task 1 required offerors to submit labor rates for numerous geographical

locations. AR 3373.

When OCI first submitted its proposal on August 9, 2012, its TCLP was

$196,662,107. AR 3378. Subsequently, the agency issued Amendments 5, 6, and 7

dealing with revisions to the price model. OCI inquired about the permissibility of

“recalculating and resubmitting a new price quote,” rather than being bound by the price

it had quoted earlier. AR 842. The agency’s response was that offerors were “permitted

to recalculate pricing as they see fit,” but were advised “to ensure proposed prices”

complied with the requirements of recently provided amendments. Id. One of the recent

instructions had introduced the opportunity of providing “explanatory pricing notes” on a

separate PDF document, but cautioned that the pricing notes were to “be limited to

explanations of details not readily discernible from the price model and shall not contain

qualifications or options which could result in a change of price.” AR 828. Further, the

“Pricing Notes” guidance reemphasized that “the price model and the TCLP calculated

by the price model will be the only price evaluated.” Id.

The import of these instructions is that OCI was on notice that 1) it could revise

its originally submitted price quote, but only consistent with the price model as amended

and 2) that it could provide explanatory notes, but the notes could not “qualify” or

otherwise change its TCLP per the price model. OCI’s submission of different TCLP

totals, one in the price model and the other in its notes, was contrary to these instructions.

OCI essentially acknowledges as much (“As directed by the Agency, this information

was intended to explain the errors in the spreadsheet as submitted,” Pl.’s Mem. At 9), but

posits simply that it didn’t expect that the Government would nevertheless “ignore” its

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pricing notes. Pl.’s Resp. to Def.’s Mot. for J. on the AR and Reply to Def.’s Resp. to

Pl.’s Mot. for J. on the AR (“Pl.’s Resp. and Reply”) at 12. “Given the significance [sic]

difference between the pricing generate [sic] by the pricing model, and that offered by

OCI reflecting probably cost to the Government, OCI reasonably assumed that prior to

the submission of proposals that the Government would consider OCI’s intended and

actual pricing.” Id.

To the extent, then, that the substance of OCI’s complaint focuses on the alleged

disparity between the price model’s specific formulation of the TCLP and the more

generic “probably cost to [the] Government as required by the evaluation criteria,” Pl.’s

Mem. at 16, OCI should have raised its concern prior to the close of the bidding process.

Furthermore, OCI mistakenly fixates on “probable cost” in alleging that the price model

failed to take into account labor rates based on geographical regions, relying instead on

ceiling rates for several labor categories. OCI’s reliance on its alternative “probably

cost” price calculation is bewildering, however, because the price amendments were

pellucid in stating that the TCLP calculated via the price model would be the only price

evaluated.16

The court finds, per the caveat established by the Federal Circuit in Blue and Gold

Fleet, that OCI has waived its objections based on price because of its failure to have

challenged the price model and its instructions regarding the TCLP prior to the final bid

submission deadline.

2. Mission Capability

The Government argues that, even if the court were to find that OCI has not

waived its objections based on price, it would nonetheless have been excluded from the

competitive range based on its deficient ratings under the Mission Capability factor and

its two subfactors. The Government elaborates that OCI’s rating of Marginal as to Factor

1, in comparison to the Good or Outstanding ratings of the companies within the

competitive range, by itself eliminated OCI from having a substantial chance of winning

the contract. Def.’s Mot. at 12. Thus, in not challenging its Mission Capability rating,

OCI cannot demonstrate standing to pursue other allegations of error in the award of the

contract. Id.

It is correct that OCI has focused on issues of price and past performance, rather

than mission capability factor per se, in its motion for judgment on the record. Yet, while

mission capability was the foremost of all the factors in importance, OCI is generally

persuasive in noting that “Mission Capability requirements fall squarely within

information challenged by OCI on its past performance and corporate experience.” Pl.’s

16

The SSAC report also noted that the Price Evaluation Team had “verified the propriety of all formulas in

the submitted price model and found that [OCI’s] calculated price of $265,619,111.06 was determined on

the same basis as all other offerors’ TCLP and therefore the only figure for evaluation.” AR 5701. It also

noted, although without elaboration, that, even “if the Government were to consider all offerors based on a

similar construct to that used by [OCI in its explanatory notes’ TCLP], its price would be the highest

evaluated.” Id.

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Resp. and Reply at 14. The allegations of prejudice, ill-sentiment, and animosity towards

OCI as a result of the Dr. Zeiger matter, albeit addressed in OCI’s motion under the

rubric of past performance, also potentially implicate the ratings it received relating to

corporate experience and key personnel, elements of sub-factors 1 and 2, respectively.

In this respect, therefore, OCI has indeed effectively questioned its Mission

Capability ratings, sufficiently so that the court cannot conclude that Plaintiff has waived

its opportunity to argue on the merits in this respect.

C. Past Performance

OCI’s claim is founded on its perception that the NGB’s unhappiness over the

termination of Dr. Zeiger prejudicially impacted the evaluation of OCI’s past

performance (as suffused in both the Mission Capability and Past Performance factors)

with respect to the instant solicitation.

The Solicitation advised that “The Government will evaluate past performance of

three (3) current or previous contracts for relevancy based on how well the contractor

performed on projects of similar dollar value, scope, and complexity.” AR 975. It also

stated, “Offerors are advised that the Government may use past performance information

obtained from centralized past performance databases and sources other than those

identified by the offeror . . . .” Id. (emphasis added).

According to the SSEB report, OCI’s three past performance submissions were

“one example of a similar scope which addressed mild adjustment disorders, associated

personal problems of SM [service members] related to deployment conditions which

adversely impacted reintegration to civilian life,” and two examples “highlight[ing]

medical support services, physician deployment scheduling, and medical readiness

support services, none of which demonstrated a behavioral health focus.” AR 5503.

Based on the three past performance submissions, the SSEB gave OCI a “Limited

Confidence” rating “due to the lack of ARNG DPH program experience.” Id. It stated

that, “[b]ased on the offeror’s recent/relevant performance record, the Government has a

low expectation that the offeror will successfully perform the required effort.” Id. Of

most significance was the SSEB’s evident disagreement with the past performance

ratings by the contracting officer for the past jobs to the effect that the past work, as

summed up by the SSEB, “was accomplished with minor problems and exceeded many

requirements.” Id. Instead, the SSEB reported:

However, one of the reviewers had prior experience with

the offeror related to the ANG Psychological Health

Program, and found the [sic] there were problems with

project management and handling personnel, both of which

are not accurate, as this company struggled with meeting

performance objectives and managing personnel.

Furthermore they failed to keep the government informed

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on key personnel decisions, firing the National Director of

Psychological Health without prior warning to the ANG, to

include no notification that the employee was on a

performance improvement plan. Based on these

experiences and the somewhat relevant experience with no

significant similar past performance beyond handling the

ANG PHP program across one half of the nation, the board

has limited confidence that 09C4 can successfully perform

in a significantly expanded contract.

Id.

The SSEB thus itemized as OCI’s past performance “weaknesses”: 1) “Problems

with project management and handling personnel”; and 2) “Failure to keep the

government informed on key personnel decisions.” Id. at 5503-04.

OCI objects that, “First and foremost, evaluators were not supposed to know the

name of the offeror being evaluated. Company names and logos were deleted from all

proposals and alphanumeric codes were used to keep proposals anonymous.” Pl.’s Mem.

at 21, citing the Solicitation’s instructions at AR 968. Indeed, of the three members of

the SSEB, it was Colonel Bringhurst who had apparently also participated in the meeting

in which agency personnel criticized the firing of Dr. Zeiger, see Post Meeting Report,

and thus had prior familiarity with OCI.

The Government, however, rightly points out that OCI itself made “unambiguous

references to its own identity” in its proposal. Def.’s Mot. at 17 (citing AR 2856: “We

are a preferred vendor of the Air National Guard (ANG) and the prime contractor for the

eastern half of the ANG Psychological Health Program serving approximately 54,915

service members at 48 wings. 09C4 has developed and implemented a successful

Psychological Healthcare Program for the ANG, which began in October 2010 and is still

active today.”). More specifically, OCI identified itself by name in its past performance

questionnaire submissions. AR 6531-32, 6536-37, and 6541-42. In any event, even if

OCI hadn’t noted its own name, it is not surprising that an evaluator such as Col.

Bringhurst would have recognized OCI merely by virtue of its description of having

performed the ANG pilot project. The court finds no abuse of discretion in the

evaluators’ inference of OCI’s identity. “The solicitation and source selection plan

simply did not require the NGB’s anonymous rating of proposals, which would not have

been feasible.” Def.’s Mot. at 18.

In addition, the court agrees with Defendant that there is no general or specific

provision in the Solicitation or Source Selection Plan prohibiting an evaluator’s

application of personal knowledge in rating past performance. Case authority is

persuasive as to the propriety of doing so. Labat-Anderson, Inc. v. United States, 42 Fed.

Cl. 80-6, 842 n.54 (1999); Seattle Sec. Servs., Inc. v. United States, 45 Fed. Cl. 560, 568

(2000); and Pitney Bowes Gov’t Solutions, Inc. v. United States, 94 Fed. Cl. 1, 14 (2010)

(citing Labat-Anderson and Pitney Bowes). Moreover, the Solicitation, as noted earlier,

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specifically advised that the past performance evaluation may be informed by “sources

other than those identified by the offeror . . . .” AR 975 (emphasis added).

In its most substantive disagreement with the Past Performance rating

(“Somewhat Relevant, Limited Confidence,” AR 5503) it received from the SSEB, OCI

notes that the NGB had received two Performance Evaluations, both dated August 8,

2012, from the ANG Contracting Officer, Christine Pettigrew, with respect to OCI’s

work on the pilot program. In the first evaluation, Ms. Pettigrew gave OCI the highest

rating available, “Outstanding,” on all five categories of performance – Compliance and

Deliverables, Project Management, Timeliness, Forecasting Costs (re Cost

Reimbursement Contracts), and Customer Satisfaction. She also added hand-written

comments: “vendor has always been compliant and met all deliverables,” “PM [Project

Management] has been effective with handling personnel,” “no problem with the product

or services deliverables on time,” “vendor has always kept the customer informed,” and

“vendor has kept the customer satisfied[,] has always looked out for best interest of

customer.” AR 6532-33. In the second evaluation, Ms. Pettigrew rated OCI as

Outstanding on four of the five categories of performance and “Good” on one category

(applicable to cost-reimbursement contracts, not at issue here). Her comments were:

“met all deliverables in a timely manner,” “PM has been effective and professional,”

“timeliness of performance was always met,” and “kept company abrest (sic) of the hold

(sic) contract.” AR 6537-38.

The three members of the SSEB, comprised of Capt. Hunter, Col. Bringhurst, and

Lt. Colonel Laura Wheeler, however took issue with Ms. Pettigrew’s ratings with respect

to project management and personnel. AR 5503. In the individual evaluation notes, for

instance, Capt. Hunter observed that Ms. Pettigrew’s comments such as “compliant” and

“no problem,” although consistently stated, were inadequate, that is, “do not support” a

rating of “outstanding.” AR 5070. Thus, she wrote that the Board “questions the validity

of the outstanding rating bec. of lack of rationale.” Id. Lt. Col. Wheeler wrote, “ratings

were not backed up by solid comments or N/A.” AR 5086. Col. Bringhurst was more

effusive: “Government rater gave ‘outstanding’ marks, but the comments reflected

‘acceptable’ level only. Government rater’s comments were inaccurate.” AR 5103. He

elaborated,

This contractor is known by this rater as they manage the

ANG Psychological Health Program. Review of past

performance ratings by the contracting officer show a

discrepancy between the ratings of “outstanding” and then

comments that suggest “acceptable.” Based on my

personal knowledge of the companies (sic) performance

they should be rated “acceptable.” In one case the

contracting officer suggests the “pm has been effective in

handling personnel” and later states, “vendor has always

kept the customer informed.” Both of these statements are

inaccurate. There have been problems with both their

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management of personnel and keeping the ANG informed

of key personnel decisions.

AR 5104.

Capt. Hunter gave OCI an overall rating of “somewhat relevant” because two of

the three past performance contracts, unlike OCI’s ANG pilot program work, were “not

specifically related to” psychological health or were “not PH focused.” AR 5070. For

similar reasons, she gave OCI a “limited confidence” rating as well. Id. Lt. Col. Wheeler

similarly found “relevance” in OCI’s ANG experience, but not in the other two past

contracts. AR 5086. With respect to confidence, Col. Wheeler determined that all three

contracts warranted only a limited confidence rating “due to lack of ARNG DPH”

experience. Id. Col. Bringhurst wrote, “Their ANG contract shows direct scope but not

magnitude of effort for a national program. So overall they have ‘somewhat relevant’ past

performance to ‘relevant.’” AR 5104. He concluded, “based on their past performance

challenges with a contract only ½ nationwide and no other significant similar

performance, I have ‘limited confidence’ that 09C4 will successfully perform the

expanded SOW [statement of work].” Id.

OCI argues that the evaluation it was given was irrational. The NGB had noted in

the acquisition planning stage of the instant procurement, “Three small business entities

[of which OCI was one] currently hold contracts for substantially similar requirements

which will be subsumed by this family of contracts.” AR 37. Thus, to assert that OCI

“had no significant similar past performance beyond handling the ANG PHP program

across one half of the nation,” AR 5396, is nonsensical when OCI’s pilot program

experience “likely is the most relevant past performance reference.” Pl.’s Mem. at 22.

Yet OCI’s argument overlooks the following salient components of the SSEB’s

determination: 1) OCI’s pilot program indeed extended to just half of the country,

whereas the Solicitation at issue was nationwide in geographical scope; 2) OCI’s pilot

program involved just the ANG, but that it had no experience in providing psychological

health services to the ARNG; and 3) the SSEB’s “somewhat relevant” rating was based in

large part on the recognition that two of the three past performance examples proffered

by OCI were not found particularly relevant to the behavioral health focus of the instant

Solicitation.

Given the “heavy burden” on the protestor to demonstrate that the agency

determination lacked a rational basis and that the court’s inquiry is limited to whether the

agency articulated a “satisfactory explanation” for its decision, the court is hard-pressed

to second-guess the SSEB here.

OCI attempts to meet this burden, however, by its heavy reliance on the

allegations related to the Dr. Zeiger matter. “This adverse past performance rating

appears to be entirely based on OCI’s decision to terminate one of its employees, Ms.

Zeiger, who was apparently a former colleague and friend of members of the evaluation

team, rather than any issues with OCI’s actual performance under the contract.” Pl.’s

Mem. at 20.

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Although this court has determined to admit the “Post Meeting Report,” it finds

that report at best ambiguous and ultimately an unreliable and one-sided rendition of the

discussion between the agency and OCI regarding the termination of Dr. Zeiger. There is

no claim that the NGB ever reviewed, agreed with, or signed off on OCI’s report of that

meeting. The Report’s notes of “Points Discussed” and “Meeting Summary” begin under

the heading of “Meeting Minutes,” but the term “minutes” most generally connotes an

approved record of proceedings. Even as merely a recitation of the meeting, the Report

does not identify who actually wrote the report, when it was compiled, or from what

source it was compiled (contemporary notes, audio recording, etc.). The legend at the

bottom of each page recites, “These materials are proprietary information of Optimization

Consulting, Inc. (OCI) and may not be used, disclosed, or reproduced for any purpose

without the prior written consent of OCI.” While the Report certainly reflects that NGB

personnel were quite distressed with the termination of Dr. Zeiger, and the manner and

timing in which OCI communication that decision to the agency, it does not provide a

convincing foundation for OCI’s claims of bias in the instant Solicitation.

Moreover, in addition to the relatively weak rating that OCI received for the Past

Performance factor, it also was rated poorly on the most important factor, Mission

Capability. For example, in evaluating OCI on sub-factor 1, Capt. Hunter observed that

OCI’s proposal “Blames Wing Commanders for problems [associated] with counselor

placement.” AR 5061. She also notes frustration with OCI’s proposal, where it “Blames

ANG for no SOP with previous award. ‘Lack of policies at contractor start up – This

should have been managed & policies should be developed by company before award!’”

Id. She further critiqued OCI’s data management plan: “talks about its importance but

does not offer ‘how or if’ it has a solution to capture data.” Id. It is also notable that Col.

Bringhurst rated OCI “acceptable” on sub-factor 1, whereas both Capt. Hunter and Lt.

Col. Wheeler gave OCI only a “marginal” score on that sub-factor.

In short, this court finds no basis for second-guessing the ratings that OCI

received for Past Performance or for Mission Capability and thus no prejudicial violation

of applicable statutes or regulations or of the evaluation criteria under the Solicitation.

D. Evaluation of Goldbelt Glacier

In a separate front, OCI faults the NGB’s evaluation of the past performance of

Goldbelt Glacier, one of the eventual awardees, in particular alleging that Goldbelt

Glacier misrepresented – as its own – the past performance of [***]. “Goldbelt Glacier

made a material misrepresentation because it proffered [***] past performance as its

own.” Pl.’s Mem. at 24.

In order to establish this claim, OCI must demonstrate: 1) that Goldbelt Glacier

made a false statement; and 2) that the NGB relied on that false statement in selecting its

proposal for the contract award. Blue & Gold Fleet, 70 Fed. Cl. at 495. “To preserve the

integrity of the solicitation process when such a material misrepresentation influences the

award of the proposal, the proposal is disqualified from consideration.” Id. “[T]he

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submission of a misstatement, as made in the instant procurement, which materially

influences consideration of a proposal should disqualify the proposal.” Planning

Research Corp. v. United States, 971 F.2d 736, 741 (Fed. Cir. 1992).

The Solicitation provided that offerors were to submit “three (3) current or

previous contracts for relevancy based on how well the contractor performed on projects

of similar dollar value, scope, and complexity.” AR 975. It further instructed, “For

contractors with limited or no relevant corporate past performance, the three (3) current

or previous contracts submitted may reflect information regarding the past performance

of predecessor companies, key personnel with relevant past performance, or

subcontractors that will key aspects of the requirement. Id.

In its Past Performance submission, Goldbelt Glacier, describing itself as the

“36D6 Team” (referencing its alphanumeric designation), presented “three Past

Performances that are similar in magnitude and scope to the requirements of the PH-RC

Psychological Health program.” AR 2374. The three programs it touted were: [***]. It

is the first of these three examples to which OCI takes exception.

That contract, regarding [***], was actually performed by [***] of Goldbelt

Glacier. Intervenor-Def. Goldbelt Glacier Health Svcs., LLC Resp. to Pl.’s Mot. for J. on

AR (“Intervenor’s Resp.”) at 14. Goldbelt Glacier’s proposal identified the “Company

Name” for this past performance example as “36D6,” which, as noted, was its

alphanumeric identifier, not that of [***]. The submission also, however, provided the

Cage Code17 and DUNS Number18 (per the instructions in the Solicitation, AR 975) that

were particular to [***]. AR 2374; Intevenor’s Resp. at 14.

Goldbelt Glacier explains in its brief that, where an offeror had “limited or no

relevant corporate past performance” of its own, it was authorized instead to submit, as

one among three options, a “previous contract” that reflected information regarding “key

personnel with relevant past performance.” AR 975. It avers, without any contradiction

by OCI, that Goldbelt Glacier’s president at the time of the proposal submission, Mr.

Steve Cook, had been president of [***] prior to his having joined Goldbelt Glacier. In

this manner, the proffer of the [***] contract for the [***] is properly encompassed in the

“key personnel” aspect of past performance. Accordingly, because of Mr. Cook’s roles

with both Goldbelt [***], Goldbelt Glacier’s listing of the [***] contract was consistent

with the terms of the Solicitation. Furthermore, because the Solicitation directed offerors

not to identify themselves or their subcontractors by name, it was not inappropriate to

have identified “36D6” as the “Company,” along with the Cage Code and DUNS Number

specific to [***].

Moreover, as Defendant argues, Goldbelt Glacier’s identification of itself, via its

alphanumeric code, was not material “because it did not have a significant impact on the

17

A CAGE (“Commercial and Government Entity”) Code is a unique identifier given to suppliers to

various government and defense agencies.

18

A DUNS (“Data Universal Numbering System”) Number is an identifier issued by Dun & Bradstreet.

-27-

determination that Goldbelt Glacier’s proposal qualified it as within the competitive

range. Def.’s Mot. at 23. The SSEB panel’s comments on Goldbelt Glacier’s past

performance submissions as well as the contracting officer’s competitive range

determination evidence that the focus of the favorable rating given to Goldbelt Glacier

was overwhelmingly derived from a favorable impression of its [***] past performance

examples. AR 5120-21, 5152, 5160, 5796.

The court thus finds no material misrepresentation by Goldbelt Glacier in its past

performance submissions.

E. Referral to SBA for Nonresponsibility Determination Not Required

OCI objects that its technical evaluation ratings by the NGB amounted to a

determination of nonresponsibility, which, by statute, requires referral to the Small

Business Administration (“SBA”) for a conclusive finding. “The Agency’s

determination that OCI lacks the requisite management and resources to perform the

contract is tantamount to a non-responsibility determination.” Pl.’s Mem. at 31. Because

no SBA finding was made in this respect, Plaintiff argues, it was improperly excluded

from the competitive range.

As decisions of the United States Government Accountability Organization

(“GAO”) have noted, “Under the Small Business Act, agencies may not find a small

business nonresponsible without referring the matter to the SBA, which has the ultimate

authority to determine the responsibility of small businesses . . .” Capitol CREAG LLC,

B-294958.4, 2005 CPD P 31 at 6 (citing 15 U.S.C. § 637(b)(7). The statute specifies that

the SBS is empowered:

To certify to Government procurement officers, and

officers engaged in the sale and disposal of Federal

property, with respect to all elements of responsibility,

including, but not limited to, capability, competency,

capacity, credit, integrity, perseverance, and tenacity, of

any small business concern or group of such concerns to

receive and perform a specific Government contract.

15 U.S.C § 637(b)(7)(A). “Responsibility concerns, among other factors, whether a

prospective contractor will be able to comply with the required or proposed delivery or

performance schedule, and whether it has the necessary organization, experience, and

technical skills (or the ability to obtain them).” Capitol CREAG at 6-7 (citing FAR §

9.104-1(b), (e).

OCI cites three examples of what it characterizes as nonresponsibility

determinations by the SSA relating to OCI’s ability to perform: 1) that OCI had “issues

with MIS, data capture, lack of SOP and counselor placement which the board feels is

indicative of a lack of relevant experience necessary to proactively address potential

performance challenges” (AR 5625); 2) that its “description of corporate management

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appears weak, as the offeror proposes email and weekly activity reports where the board

feels a simple conference call would be timelier for issues resolution as well as in

keeping communication channels open” (AR 5625); and 3) that OCI’s past project

management and personnel handling experiences and the “no significant similar past

performance” other than the ANG PHP program gave the board “limited confidence that

09C4 can successfully perform in a significantly expanded contract” (AR 5633). Pl.’s

Mem. at 31.

Defendant responds that referrals to the SBA under section 637 are triggered only

when there must be a determination of “all” of the elements of responsibility and that, per

the implementing provisions of 48 C.F.R. (FAR) 19.602.1, “a contracting officer only

makes a responsibility determination after a small business firm is determined to be an

apparently successful offeror.” Def.’s Mot. at 30 (emphasis added); see also Capitol

CREAG at 7 (responsibility review normally conducted post-evaluation).

The court does not find the Government’s position here initially dispositive. It

agrees with the GAO that, where traditional “responsibility” factors are employed as

technical evaluation criteria and the evaluation renders an offeror’s proposal flatly

ineligible for award, “the agency has effectively made a determination that the small

business offeror is not a responsible contractor capable of performing the solicitation

requirements.” Id. On the other hand, where the “responsibility-type criterion” is applied

in a “comparative or tradeoff analysis,” it is not “tantamount to a nonresponsibility

determination.” Id.

Thus, for example, in Capitol CREAG, the offeror’s approach to management and

staffing factors, which may sometimes be considered responsibility criteria, was found to

create “a high risk of unacceptable performance” even though it was not technically

“inadequate.” The offeror’s proposal was rated “marginal,” rather than “unacceptable.”

The GAO re-emphasized that “no SBA referral is needed where the small business

offeror is not selected for award merely because, while its proposal is evaluated as

acceptable, another offeror’s proposal is evaluated as superior under a comparative

analysis or because of a cost/technical tradeoff analysis.” Id. n.6. Similarly, in Nomura

Enterprise, Inc., B-277768, 97-2 CPD ¶ 148 at 3 (Nov. 19, 1997), GAO noted the general

rule that “[a]n agency may use traditional responsibility factors [where] a comparative

evaluation of those areas is to be made.” A “comparative evaluation” is one with

“competing proposals [that] will be rated on a scale relative to each other, as opposed to a

pass/fail basis.” Id. Similarly, in Medical Info. Servs., B-287824, 2001 CPD ¶ 122 at 5

(July 10, 2010), GAO observed that “[w]here a proposal is determined to be deficient

pursuant to a [comparative] evaluation, the matter is one of relative technical merit, not

unacceptability, which would require a referral to the SBA.”

Accordingly, the question is whether OCI’s ratings – and exclusion from the

competitive range – were the result of a comparative evaluation or the result of a

“pass/fail” test. On the Solicitation’s adjective rating scale, “Marginal” signified that a

“proposal does not clearly meet requirements and has not demonstrated an adequate

approach and understanding of the requirements. The proposal has one or more

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weaknesses which are not offset by strengths. Risk of unsuccessful performance is high.”

AR 5575. By contrast, “Unacceptable” meant that the “proposal does not meet the

requirements and contains one or more deficiencies. Proposal is unawardable.” Id.

Likewise, the definitions for “Limited Confidence” and “No Confidence” under the Past

Performance factor demonstrate that, in the first instance, the agency retains some, albeit

limited, confidence in the offeror’s ability to perform, while it has none for a recipient of

the lowest technical rating. AR 5576-77. OCI, clearly therefore, was not ruled out of

consideration on a pass/fail basis as it would have been had it received an “Unacceptable”

or “No Confidence” rating (and as other offerors had been, AR 5580). Rather, its

deficiencies related to how it proposed to perform. See, e.g., Capitol CREAG at 8.

Three of the 10 offerors did receive “Unacceptable” ratings on one or more

factors or subfactors, AR 5762, and were deemed “unawardable as submitted.” AR 5881.

Of the remaining seven offerors, four were determined to qualify for the competitive

range. Goldbelt Glacier, for example, received ratings of “Outstanding” for the most

important factor, Mission Capability, and both of its subfactors. The other three in the

competitive range all were rated “Good” for Mission Capability and both its subfactors.

OCI, however, was rated “Marginal” for this factor and subfactors, while the other two

offers who did not make it into the competitive range were rated “Acceptable,” slightly

higher even than OCI. The “Competitive Range Determination,” signed by the

Contracting Officer and the Source Selection Authority, is extensive in its comparative

evaluation of the four offerors selected as within the competitive range with the three

offerors, among them OCI, that were not deemed “unawardable” but which, nonetheless,

were eliminated from the competitive range. See, e.g., AR 5890 (“Comparison of 36D6

[Goldbelt Glacier] to 09C4 [OCI]”).

There is thus no basis for finding that OCI was entitled at that stage of the

Solicitation process to a referral to the SBA for a responsibility determination.

IV. Conclusion

For the reasons stated above,19 the court finds no basis to disturb the NGB’s

determination of the competitive range in this Solicitation. Plaintiff’s motion for

judgment on the Administrative Record is thus denied and Defendant’s cross-motion is

hereby granted.

The Clerk of Court shall enter judgment accordingly.

s/ Edward J. Damich

EDWARD J. DAMICH

19

The court also finds insubstantial OCI’s argument that the involvement of Karen Klepadlo as a contract

employee for the NGB created an appearance of impropriety. The email to which OCI refers was neither

nefarious nor an encouragement to OCI’s employees “to move to OCI’s competitors.” Pl.’s Mem. at 29.

Similarly insubstantial are OCI’s insinuations of “taint” due to the attenuated string of Ms. Klepadlo’s past

affiliations. Id. at 29-30.

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Judge

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